Billiton Aluminium Australia Pty Ltd has today made a binding offer to acquire CSR Limited’s interest in the Gove alumina refinery and bauxite mine in the Northern Territory for US$275 million.

The offer today follows a heads of agreement which CSR and Billiton signed in March,and a period of due diligence by Billiton.

The Govejoint venture contains pre-emptive rights for al group to purchase the CSR stake during asix-month period, on the same terms as offered by any potential buyer.The Billiton offer is subject to these provisions.

Billiton Aluminium Australia is a wholly owned subsidiary of the UK mining and metals company Billiton plc.

GAL has a 30% stake in the Gove joint venture, with the remaining 70% owned by Swiss Aluminium Australia Ltd, a subsidiary of algroup.

AMP intends to quit its stake in GAL at the same time as CSR.GAL has offered to buy back AMP’s 30% shareholding in GAL at apro-rata price in line with that offered by Billiton for CSR’s interest.In total, the Billiton offer values GAL(100%) at US$393 million. The sale of GAL to either Billiton or algroup issubject to necessary governmental approvals.

CSR’s Managing Director Peter Kirby said he was satisfied that the offer fromBilliton would add value for CSR shareholders.

“This divestment is in line with our strategy to focus CSR on internationalbuilding materials.We are narrowingour portfolio of businesses through divestments, and at the same timeexpanding our building materials operations, particularly CSR America,” saidMr Kirby.

“When the transaction is finalised, funds from the sale of GAL will be used to reducedebt. Until that time CSR will continue to earn profits from the Govebusiness.”

“CSR has hada long-standing and close working relationship with Swiss Aluminium, whichhas been to the mutual benefit of both companies over many years. We will besorry to see that relationship end,” said Mr Kirby.

“We also owe thanks to the employees past and present of Nabalco Pty Ltd, the Goveoperating company, who have made this project the success it has been.”

The Gove joint venture produces around 1.8 million tonnes of alumina a year, of whichGove Aluminium’s share is about 540,000 tonnes.As well, the joint venture produces over 6 million tonnes ofbauxite a year.Around 60% of GoveAluminium’s alumina entitlement is sold on a long-term basis to Gove AluminiumFinance Ltd, which holds CSR’s continuing interest in the Tomago aluminiumsmelter in the Hunter Valley, New South Wales.This supply arrangement will be maintained under the sale byCSR of its stake in GAL.

Billiton plc, with a market capitalisation of around A$14 billion, is listed on the London, Paris and Johannesburg stock exchanges.It is one of the world’s leading mining and metals businesses,with operations in Australia, Brazil, Canada, Colombia, Mozambique, SouthAfrica and Surinam. Billiton ranksamong the top four international producers of aluminium and alumina.